Large-Scale Land Acquisition For Agricultural Development .

Regional Workshop on Responsible Large Scale Agricultural Investment in the Mekong,Vientiane 15-17 November 2017Large-Scale Land Acquisition for Agricultural Development inthe Mekong Region (CLMV): An UpdateJean-Christophe Diepart, MRLGNgin Chanrith, RUPP - CambodiaVongphaisit Chansamone, NERI - LaosU San Thein, GRET - MyanmarNguyễn Anh Phong, IPSARD – Vietnam

Research-based Policy Dialogue on FDI and LSLAViet NamMyanmarCoordinationMRLGLaosCambodia

Objective: Take stock of 20 years of large-scaleland acquisitions with a regional perspective

Rise, fall and rise again of large agricultural 183019471988Doi Moi18601954Agrarian on ofagro-industrial plantations183019861950Reemergence ofplantation1990

The rise again of large agricultural plantations

Why? Ups (and downs) in the agricultural commodity priceProjectionsData: World Bank

Why? The Large-Scale Agricultural Development Model Large Scale is an option in countries with yield gap and land availability(Deininger et al 2011) Underlying assumptions: investment, scale, labour, revenue and agroprocessing Seek complementarity between large-scale and small-scale models Opportunities for governments: promote development, territorialcontrol and geo-strategic interests

Changing regional context Structural economic transformations in CLMV countries Economic asymmetries and the central role of China inregional agricultural commodity trade flows Convergence of investments and trade negotiations

Structural transformations in CLMV countries 6.9 % (2006‐2016) 8.9 % (2006‐2016) 7.8 % (2006‐2016) 6.1 % (2006‐2016)Data: World Bank

Structural transformations in CLMV countries 6.9 % (2006‐2016) 8.9 % (2006‐2016) 7.8 % (2006‐2016) 6.1 % (2006‐2016)Data: World Bank

Asymmetries of economic powerJ / contextSKChina2016 Balance ofTrade, billion USDChina 485South Korea 120Singapore 83Japan 38Thailand 36Malaysia 24Indonesia 15Viet Nam 14Brunei 2Cambodia‐3Laos‐4Myanmar‐7Philippines‐ 34India‐ 104(BT Exports‐Imports)IMLVTPCMSData: ADB, 2017Mapping: J.‐C. DiepartAgricultural commoditiestrade flows?I

China –Mekong trade relations: only one part of a much wider pictureFrom WorldTo WorldTo CLMV T ChinaFrom CLMV T22%4.5%Chinese importsAll commoditiesTotal exports from CLMV TAll commoditiesData source: Comtrade, 2015

But trade of agricultural commodities is more important regionallyTo WorldFrom WorldTo CLMV T ChinaFrom CLMV T30%10.7%Chinese importsAgricultural commoditiesTotal exports from CLMV TAgricultural commoditiesData source: Comtrade, 2015

2006‐2015 Aggregate trade flows of agricultural commodities (2 levels)ChinaVMLValues in billions Thailand to China77.5Viet Nam to China29.9Thailand to Viet Nam6.6Myanmar to China5.4Cambodia to Viet Nam3.7Laos to China3.4Laos to Viet Nam3.0Viet Nam to Thailand2.7Myanmar to Thailand1.9Laos to Thailand1.1Cambodia to China0.9Cambodia to Thailand0.8Myanmar to Viet Nam0.8Data source: Comtrade, 2015TCSource: Comtrade, 2015Mapping: J.‐C. Diepart

Increase in FDI but FDI in agriculture is smallShare of agriculture, forestryand fisheries in FDICambodiaLao PDRMyanmarViet Nam10.38%4.20%2.09%0.41%Data: ASEAN Secretariat, 2016Data: UNCTAD

Mapping: J.‐C. DiepartConvergence of trade and investment agreements as part of regionalintegration

National institutional frameworks for LSLA

Characteristics of land deals Spatiality of land deals Agrarian structure: large-scale versus smallholder Intra-regional flows of investments on land Cluster of investments

Transformation of agrarian structuresMyanmarViet-NamAgro-Business Concessions:Area: 2.08 M. ha# Deals: 3,603Agro-Business Concessions:Area: 0.25 M. ha# Deals: 7Smallholders:Area: 13.1 M haPopulation: 64%Smallholders:Area: 10.0 M haPopulation: 61%Sources:Concessions: ODC 2017 ( MRLG)Smallholders: FAO, 2014Sources:Concessions: Land Matrix, 2017Smallholders: FAO, 2014CambodiaLaosAgro-Business Concessions:Area: 2.03 M ha# Deals: 245Agro-Business Concessions:Area: 0.44 M ha# Deals: 571Smallholders:Area: 3.2 M. haPopulation: 64%Smallholders:Area: 1.1 M. haPopulation: 74%Sources:Concessions: MRLG, 2017Smallholders: FAO, 2014Sources:Concessions: NAFRI-CDE, 2012Smallholders: FAO, 2014

Intra-regional flows of investment in land and economic securitizationChinaVietnamMyanmar69% intra CLMVT ChinaLaosThailand87% intra CLMVT ChinaCambodiaData source: ODC, CDE, MoALIMapping: J.‐C. Diepart

Geo-politics: GMS corridors and land concessionsData source: ODC, CDE, MoALIMapping: J.‐C. Diepart

‘Origin-type’ investment clusters1437Clusters of investments1Chinese‐domestic investments in rubber2Thai‐domestic investments in rubber3Chinese‐domestic investments in rubber4Chinese‐domestic investments in banana5Vietnamese‐domestic investments in rubber6Thai‐domestic investments in sugar cane7Thai‐domestic investments in sugar cane8Thai‐Vietnamese investments in coffee/cassava/rubber8256Data source: ODC, CDE, MoALIMapping: J.‐C. Diepart

Impacts - deforestationCLand acquisitions (ELC) can act as powerfuldrivers of deforestation (Davis et al 2015)LMVExpansion of commercial agriculture is aleading driver of deforestation (Woods 2015)

Deforestation and ELC in CambodiaCambodiaTree loss 2002‐2016 (since 2002 log ban)Land Concession up to 2016Data source: Hansen et al.Mapping: J.‐C. Diepart

Impacts - land use [in]efficiencyC Area planted represent only 20 percent ofthe total land area allocated (Fella et al, 2017)LM 23% of concession area planted (Woods, 2015) 14.5% of concession on VFV land are planted(U San Thein and Diepart 2017)V

Impacts - land use [in]efficiencySource: San Thein and Diepart 2017

Impacts - land [in]availability and land conflictsC 770,000 people affected by ‘land grab’ between 20002013 (Adhoc 2014)L ‘Facilitated’ Dispossession (Kenney Lazar 2012)M Use of force by military (LIOH, 2015)V Dispossession through ‘constrained’ land allocation to largescale rubber scheme (Dao 2015)

Impacts - economic returnsImpacts on livelihood Job creation: quite limited for locals, working conditionsquestionable and seasonality issues (Kenney Lazar 2012) Wage labor and new income formation mechanisms (Diepart andSem 2016, Kenney-Lazar 2012, Dao 2015) Negative impacts outweigh positive ones (Gironde et al., 2015)Small contribution to national revenue Cambodia: 0.14 % national budget in 2015 (PPP, 2016)Counter-movements: Communities and civil society

Evaluations by the State .Order 01Moratoria andEvaluation‘Return of land’

the fall again of large scale plantations?Thank youjc.diepart@gmail.com

Cambodia to Viet Nam 3.7 Laos to China 3.4 Laos to Viet Nam 3.0 Viet Nam to Thailand 2.7 Myanmar 1.9to Thailand Laos to Thailand 1.1 Cambodia to China 0.9 Cambodia to Thailand 0.8 Myanmar 0.8to Viet Nam Data source: Comtrade,2015 2006‐2015 Aggregate trade flows of agricultural commodities (2 levels) C M L V T China